March 20 (Bloomberg) -- Aguas Andinas SA, Chile’s largest
water utility, is weighing issuing inflation-indexed bonds as it
invests $150 million this year to improve Santiago water
distribution networks after a mudslide left a third of the city
without tap water in January.

Aguas Andinas, controlled by France’s Suez Environnement
Co., will seek board approval for the sale early this year,
Chairman Felipe Larrain said in an interview in Vina Del Mar,
Chile today. He declined to say how much the company will seek
to raise.

The $150 million investment will provide added storage
capacity and tap more underground aquifers as the company seeks
to reduce dependence on water sourced from the Maipo River after
mudslides caused by heavy rain increased the river’s turbidity
and cut off 1.1 million customers for several hours. The company
will also present a second stage of investments that will
further safeguard supply to Chilean authorities next week,
Larrain said.

“Nothing is 100 percent safe; there are always risks,”
Larrain said. “Even so, we will be carrying out new
investments.”

Aguas Andinas carried out $400 million in investments
between 2000 and 2012 to provide sanitation to all of the city’s
residents and halve the amounts of water leaks in Santiago over
a decade, Larrain said.

Spain’s Soc. General de Aguas de Barcelona took control of
Aguas Andinas in a 1999 privatization. Suez took control of the
Chilean company in 2008 when it bought the 147-year-old Spanish
company known as Agbar.